“Sod the wine, I want to suck on the writing. This man White is an instinctive writer, bloody rare to find one who actually pulls it off, as in still gets a meaning across with concision. Sharp arbitrage of speed and risk, closest thing I can think of to Cicero’s ‘motus continuum animi.’

Probably takes a drink or two to connect like that: he literally paints his senses on the page.”

DBC Pierre (Vernon God Little, Ludmila’s Broken English, Lights Out In Wonderland ... Winner: Booker prize; Whitbread prize; Bollinger Wodehouse Everyman prize; James Joyce Award from the Literary & Historical Society of University College Dublin)





06 August 2013


A commodity called discount
and a community enthralled
Barossa welcomes big pillager

“Retailer shows interest,” blared the front page of The Leader, “the Barossa’s favourite newspaper.”

Being in the habit of reading local newspapers whenever I travel around Australia’s vignobles, I baulked at this news when I visited the Barossa to attend Peter Lehmann’s wake.

“A two day regional red wine tasting initiated by the Barossa Grape Wine and Tourism Association (BGWA) has the potential to allow more Barossa labels to be sold in alcohol retailer Dan Murphy’s,” reporter Emma Moreland wrote.

“A dinner held at Peter Lehmann Winery, Tanunda, gave producers a chance to talk with the buyers, share the story behind their label [sic] and gain valuable feedback from the group ... Mr James March, BGWA CEO, said the initiative was a chance to showcase the region and assist wineries in getting their wines on the shelves.”

Peter Lehmann Wines is now owned by the Swiss Hess family, which owns big wineries on four continents.  While Doug Lehmann still sits on the Lehmann board, no Lehmanns work at the winery these days, and it no longer insists on sticking to locally-grown grapes.

Dan Murphy’s is Australia’s biggest liquor discounter.  It is owned by Woolworths, which also owns the BWS chain, and the vast Barossa winery, Cellarmasters, also known as Dorrien Estate.

Through its subsidiary Vinpac, Woolworths is also Australia’s biggest contract wine bottler, meaning it gets the chance to sample and analyse vast numbers of wines made legitimately by the thousands of small producers who cannot afford their own bottling lines and who don’t necessarily sell their wine through Woolworths.  I have written here before that through this tentacular grasp of Australia’s wine, Woolworths owns an intelligence-gathering network which would make the Mossad envious.

Woolworths makes good friends in the Barossa by permitting many small producers – “artisans”, they call themselves - to make their wine in its giant wineries.

At the other end of the story, Woolworths also owns Langton’s, Australia’s biggest wine auctioneer.  Langton’s is famous for its “classification”, a formal ranking of Australia’s wines based on their tertiary prices at auction. Penfolds Grange is always at the top, giving the appellation great weight.  While Woolworths is the biggest seller of Grange, and through Langton’s boasts of the great profits the wine can bring on this tertiary market, it drives Penfolds nuts by discounting Grange upon its release.  The current vintage, the 2008, was released with a recommended retail price of $785, but Woolworths was soon selling the wine at $645.

Cellarmasters is in the business of producing wines which are packaged to look like they are made and packaged by small family outfits.  When a small private firm is in difficulty, for example, the Woolworths man will suggest a joint venture.  His mob will borrow the artwork from the struggler’s brand, modify it slightly, put it on wine bought from that producer at a bargain rate, or other wine made in Cellarmasters, and sell it by direct mail, or exclusively through Dan Murphy’s or BWS as if it came straight from the original struggler.  None of this wine ever carries a label which explains it is in fact made and packaged by Woolworths.

Most of the wine you see on the floor of a big Dan’s store is made and packaged this way.  While the front of the shop might stack some real wines with honest labels, made by the folks who purport to have made it, such wine is often bought by Woolworths at the standard wholesale price, but then sold below-cost, simply to get the punters through the door.  These wines are called “loss leaders,” and trash that producer’s ability to maintain a fair price in the rest of the market.  

Once you’re past them, and you’re lost in the ponderosa within, you’re really trapped in avatar land, with hectares of wine made by Woolworths themselves, dressed as if it were made by the equivalent of the poor honest John whose impossibly cheap wine you’ve just walked past.  But in here, in these miles of aisles, you may imagine the ivy hanging over bluestone cellars in some shady Barossa lane, but there’s no imagining in the profit division.  Woolworths makes its millions in this, the biggest part of the store.

“Peace of mind with our home tasting guarantee,” the current Cellarmasters propaganda trumpets. “Every wine you receive has achieved a medal-winning equivalent score from our expert tasting panel, using Australian Wine Show judging criteria.”

The Leader story ran beside a photograph of a proud Jason Schwarz, of the tiny Barossa producer Schwarz Wine Company.  Schwarz sales and marketing man, Nathan Gogoll was quoted as saying “So many people are buying wine in Dan Murphy’s and if a bottle of Schwarz wine is in so many of those different spots … there’s exposure for a little brand like ours that’s emerging and growing.”

Gogoll admitted that the wine “may not be sold at a high price.”

James Lindner, of local hero Langmeil Wines, owners of the world’s oldest Shiraz vineyard, The Freedom, was also quoted.

“It helps the Barossa through their third party endorsement,” Lindner said of Woolworths.  “It helps the wineries they support sell some wine and helps the growers these wineries support sell their grapes.”

So before I went off to raise a glass in memory of the great Peter Lehmann, the hero of the small growers of the Barossa, I stood there shaking my head in the newsagency.  In the valley that boasts of its dedication to its peasant-scale grapegrowers, its fine local produce and its Slow Food movement, the valley which would not even permit a McDonalds to open in the industrial zone of Nuriootpa ...

The valley which now seems proud to be just another outpost of the Woolworths liquor empire; the centre of a business dedicated to selling, not premium wine, but that brave new commodity called discount.


Bob Colman said...

Thanks for spoiling my day. Don't these people realise that dealing with these giant companies just leads to disaster in the end and trashes your brand? The front end guy might be the loveliest guy in the world when he's doing the initial deal with you but he's just another "brick in the wall" and when the MD sees his yearly bonus disappearing because the share price isn't high enough, the nice guy will come knocking on your door and screw you.

Anonymous said...

Such is life Bob, such is life! Get over it we have to sell our wines and to be honest the big boys are no different to a small retailer who also demands their pound of flesh and in reality are bigger wingers!! At least we get paid dead on time by Coles and Woolies.

Craig Butcher, Rowland Flat SA said...

Why dress up your blog rant as actual news? A journo should look at a situation and seek answers rather than just vomit an opinion.

The Leader is no one's idea of a serious newspaper, and the Woolworths story would've been awful on page 10 let alone the front page, but at least they asked questions.

So small producers who formally shunned the supermarkets are now seeking them out? Why is that?

Maybe you've been writing news style so long it comes naturally but it makes it that much harder to tell the dreck from the rigorously prepared news.

I don't have any problem with the facts of your post but it seems you're either too lazy or too insensitive to ask why.

Philip White said...

I reported what I happened to encounter on my way to the wake of a great friend. As you have just proven, there is plenty of opportunity here in this comments box for "small producers who formally shunned the supermarkets [and] are now seeking them out?" to explain why. I get a lot of abuse from the smoke and mirrors anonymous division on this, so I respect you for using your name, thankyou Craig.

@panda9d said...

@whiteswine Fantastic article.

@FassinaLiquor said...

Another enlightening article by Phillip White (@whiteswine) on the decline of the Aust. Wine Industry via Woolworths

Bob Colman said...

Thanks for your comment Anonymous. Wait until they start to charge you a fortune for shelf space (or are they already - I don't know). I'm a wine buyer, not seller and don't go into the chain stores unless I'm away somewhere and there is absolutely no other choice. A man's not a camel after all. I look for quality and reasonable value and nearly always buy direct or from a knowledgable independent.
However, its your business so it's up to you how you want to flog your product.

Anonymous said...

So now Langmeil has sold its Barossa Old Vines brand to Woolies, how many "old vines" will they discover? How old will they be? How will they protect their acquisition?


Anonymous said...

“It helps the Barossa through their third party endorsement,” Lindner said of Woolworths. “It helps the wineries they support sell some wine and helps the growers these wineries support sell their grapes.”